Construction materials supply returns to pre-Covid levels

Following its summer break, the September meeting reports the supply of most building materials returned to pre-covid levels.

This includes bricks, blocks, boilers, plaster and timber products, according to the latest statement from John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Product Availability working group.

Mineral wool has come off allocation and returned to normal supply. Looking ahead, a major supplier is investing £50m to increase capacity for glass mineral wool to support anticipated demand stemming from works under the Social Housing Decarbonisation Fund, which must be completed by the end of 2024.

Due to the sharp fall in house building over the past year, brick stocks have recovered and availability is no longer a key issue. On the other hand, some concerns persist around the supply of semi-conductors particularly for certain electrical components, despite the increase in worldwide capacity.

“The proper surveys of RAAC in certain public buildings are ongoing to assess any need to replace, repair or remediate those materials,” the statement continues. “The CLC has formed a RAAC industry response group to respond to this challenge and will share views on any supply chain concerns. Though in early days, at this time we have none in regard to product availability.

“Price inflation has stabilised. Whereas a year ago we were seeing increases of over 5%, if products are increasing in price, it is now at 1-2%. There are reports of more discounts in the market and some indicators show prices coming down. The price of timber, for example, continues to fall, along with some plastic and energy intensive products.

“This is largely due to a stagnation of demand, particularly the ongoing decline in housebuilding activity over the last six months. Poor weather and strikes in July and the August holiday period also contributed to a slowdown in activity over the summer. Although there are signs of improvement in some regions in September, the key economic drivers – inflation, increased cost of living and higher interest rates – will remain a significant challenge for construction output for the rest of the year.

“As mentioned in our June statement, we are also aware that, with the availability and cost of financing options increasingly limited, commercial behaviour is likely to harden putting pressure on lower tiers and SME companies reducing cash-flow capacity and making liquidity a greater challenge.

“We are seeing an increase in the number of insolvencies and administrations; this is an area we will continue to monitor.”